A Fantasy Football Theory of Immigration

As a first-year student at Wesley Theological Seminary, I decided to start a fantasy football league with the goals of encouraging friendships and encouraging blasphemy. It was a huge success. Friendships were created, football was watched, beer was consumed, and unforgivable sins were sinned. It’s been going strong for 9 years.

Fantasy football revolves around two things only: 1) Creating offensive/funny team names, and 2) Feeling superior to your friends for little to no reason.

Best team names in John Wesley’s Fantasy to compete for the Kisker Cup:

  • Biden’s Death Panel
  • Mark Driscoll’s Feminist Workshop
  • Like My Weems? No. I Lovett.
  • Ocho-Cinco Theses
  • 2 Christologies 1 Cup
  • And my personal favorite: Secret Muslim November Surprise

For those of you who don’t know, your standard fantasy football league consists of 10-12 teams and each team can select from all active NFL players. A standard team has a starting lineup of 1 quarterback, 2 running backs, 3 wide receivers, 1 tight end, 1 kicker, and 1 defense. All you do is select your players, and after each week’s game, you add up each player’s stats. The higher the stats, the higher the score. This isn’t football. It’s a math game that counts pro football stats alongside really bad puns.

Oddly enough, players who score the most fantasy points aren’t always the highest valued or best players in fantasy football. Because a fantasy team has to use 1 quarterback, 2 running backs, 3 wide receivers, and so on, maximizing total points for your team isn’t about getting players who score the most points, it’s about acquiring players who score more points relative to other players at their position. As a result, while quarterbacks score more points than anyone else, running backs who score half as many points or less are often much more valuable.

To explain, imagine if quarterback (QB) Tom Brady scored 50 points a game by throwing a lot of touchdowns. Running back (RB) David Johnson scored 20 points a game by running for a lot of touchdowns. Tom Brady scores more points, but if the average quarterback in the NFL scored 45 points a game, Tom Brady would only be worth 5 points more than the average QB. If the average running back only scored 5 points a game, David Johnson would score 15 more points than the average RB. A team of average QB + David Johnson would score more than Tom Brady + average running back. As a result, David Johnson is worth more even though he scores fewer points than Tom Brady. The lesson: A fantasy player’s relative value is the fantasy player’s actual value.

In fantasy sports, a player’s value is measured by their draft pick, or in some leagues, actual dollar amounts you spend to get them on your roster. Take a look from fantasypros.com’s standard ranking for 2017:

The top rated quarterback and arguably the best player in the NFL, Aaron Rodgers, doesn’t show up until number 31 (as of posting). The reason is because there are 32 teams in the NFL, which means that 32 quarterbacks will play each week. If your fantasy team only starts 1 quarterback and there are 12 fantasy teams in your league, there are a lot of other options. But if your fantasy team starts 2 running backs and each NFL team only starts 1, there are few fantasy substitutes. Due to the scarcity of good players within the running back position, running backs are more valuable relative to other positions. Wide receivers (WR) are in a similar position.

I love fantasy football for more than just the funny team names and watching my favorite players. I love it because I get to see how economic theories and models play out in non-traditional settings. The mistakes people make, the values placed on players, and how that differs from regular NFL football, can all be accurately predicted. And yet, these basic economic lessons learned in fantasy football are rarely applied to other parts of life, even by people who play obsessively. In truth, immigration policy isn’t all that different from your standard fantasy football draft evaluation, if only those who play fantasy football would apply the same lessons.


There are two standard arguments for limiting or decreasing immigration into the United States. 1) Immigrant workers compete with native workers thus increasing native unemployment, and 2) Immigrant workers compete with native workers thus driving down the wages or benefits received by natives.

The standard arguments have a lot going for them. They’re simple, easy to understand, and are rooted in basic common sense. If a buyer has two sellers who offer the same product (in this case a job), the buyer can offer less money and play the sellers off each other driving the price down. An employer is in a strong bargaining position if there are many different applicants and can ask to pay a lower wage. This is a rare case of something being both naturally intuitive and also taught by basic economic theory.

But the standard arguments quickly fall apart in reality. Not only is increasing immigration positively correlated with low unemployment, but increased wages are also positively correlated with high levels of immigration as well – immigration, employment, and increased wages all increase at the same time. This shouldn’t be surprising. When there are more available jobs, and employers are paying more money to employees, more foreign workers will try to get them alongside native workers. Also, the standard argument depends on the assumption that amount of jobs is static as if the number of available jobs is fixed within the economy. However, there is no fixed number of jobs. Jobs are a dynamic market response to demand, and when people immigrate, they also need housing, groceries, and computer repair which stimulates even more demand. Economic dynamism through other factors like worker productivity, technological growth, and consumer confidence are difficult to measure, but are far more important factors for employment than simply counting the total number of immigrants.

Still, even after claims like “immigration decreases wages” or “immigration increases unemployment” are debunked both in theory and according to available evidence, people are still hesitant to support more immigration. Another more refined argument is often presented and is often championed by politicians who oppose each other ideologically. This refined argument has been long supported by people like Donald Trump and Bernie Sanders.

The refined argument is a lot like the standard one, but instead of stating that immigration increases unemployment or that it decreases wages, it claims that immigration increases unemployment and that immigration decreases wages for the working class. Opposition to immigration is often sold in this manner as being humanitarian and rooted in a concern for the poor rather than just being anti-immigration. A corollary argument is that we don’t want to stop immigration, we just need the right kind of immigration. The right kind of immigration is of course, immigration that doesn’t compete with the working class (or whatever class or industry from which you want to win votes). As a result, many people support immigration for high-skilled workers but not low-skilled ones. This conveniently fits into nationalist or even outright bigoted views which only want immigration from countries like Canada, the UK, France, or those that share our values – read: rich, white, Christian countries. No one cares if software engineers move to the US from Canada, but those construction workers from Mexico? They’re ruining the economy!

The refined argument, along with nationalist ones, supported by populists like Bernie Sanders and Donald Trump, are certainly appealing, but as appealing as they are, they run into the same problems that the standard argument does. The numbers just don’t support their claims, and their argument runs counter to basic economic theory.

Remember why running backs are more valuable than quarterbacks in fantasy football? They’re not more valuable because they’re better players, or even because they score more points. In most cases the running backs that you choose over Aaron Rodgers and Tom Brady score fewer points and are in fact, much worse football players in real life. They’re more valuable in fantasy football because they score more points relative to other players at their position. Remember, their relative value is their actual value. You win by acquiring players who score more points relative to other players at their position, not by getting players who score the most total points.

When a “low-skilled immigrant worker from Mexico” enters the workforce in the United States and begins to compete against native workers for jobs, the low skilled worker affects the job market by “taking a job”, but more importantly, by changing the relative value of all workers who are currently competing.

“The low-skilled immigrant worker from Mexico” may be intelligent and hard-working, but compared to the average US worker, the Mexican worker is almost always at a serious disadvantage. English is unlikely to be the worker’s native language. Education quality or level completed is likely to be less than the average US worker. Knowledge of work culture, expectations, and customs is likely to be far lower. Legal status and protection may place the worker at a disadvantageous position creating risk for both worker and employer. Long-term commitment to the job is likely far lower than the native worker as the Mexican worker may choose to leave, or through the laws of the United States, could be forced thus increasing the expectation of staff turnover and costs. Such examples could continue indefinitely. Simply put, on average, low-skilled foreign workers are generally less desirable to employ than native low-skilled workers by employers. If you don’t believe me, go to any union hall in America and ask.

As a result, the native low-skilled workers relative value does not decrease with higher levels of immigration. It increases. By a lot. If you were an employer and you were trying to hire workers for your company and John was an average worker, you would pay him an average salary compared to everyone else with similar skills and experience. But if the job still needed to be done and the quality of worker suddenly declined and your available adequate workers were terribly in short supply, John is a much more attractive option to hire or to retain as an employee. Suddenly, even without gaining skills or working harder, he’s more valuable and his market value has increased. This is the fantasy football equivalent of other available running backs getting injured – suddenly your average running back looks pretty good!

John can get paid more because the quality of the competition has declined. This is exactly the same thing that happens when lower-skilled foreign workers enter the United States. Increased immigration from poor countries increases the relative value of American workers thus increasing their actual value.

The standard argument could only plausibly make sense if foreign workers were perfect substitutes for American workers, but available evidence (and racist nationalists) tell us exactly the opposite. The majority of foreign workers in the United States are not perfect substitutes. They are imperfect substitutes, just as a no-name running back in fantasy football is an imperfect substitute to your average starter who broke his leg. The presence of imperfect substitutes doesn’t just increase the value of the “original”, the imperfect substitute is one of the main reasons why the “original” was highly paid in the first place – the other options aren’t as good. If substitutes weren’t imperfect, but were instead perfect, the price would always be low because workers could be switched around at will. Increasing the amount of imperfect substitutes into a labor market raises the relative value of the “original”. The only group for whom immigrant workers may be perfect substitutes are high school dropouts and the last generation of immigrant workers.

Those who argue only for high-skill labor are actually working against the well-being of the working class. By making working class Americans compete in the job market against only high skilled laborers, their relative value declines and they will get paid less or will be pushed to unemployment.

Many people will take offense at the suggestion that some workers are “lower-skilled” or that others are “imperfect substitutes”. Such complaints aren’t based in reality and only function to protect their own entrenched beliefs. Ironically enough, such people almost always support candidates who want to restrict immigration “for the sake of the working class” resulting in permanent low wages for immigrants in their native countries and stagnant wages domestically. They’re neither humanitarians nor doing anyone any service. Don’t be like them. People actually do have skills that we can quantify and the introduction of such skills into an economy is almost always good – even better if those skills are markedly different than what is currently available. Different skills benefit an economy even if those skills are “lower”.

American working class wages have declined or stayed stagnant over the last few decades mostly because technology has become perfect substitutes for a number of different tasks once done exclusively by laborers and workers have had difficulty increasing their skills relative to the incredible pace of the competing technology. In fact, machines have become so productive that they’re often superior options instead of substitutes. As the number of Americans working in manufacturing has declined and the amount of money spent on capital improvements has increased, productivity has greatly increased. We produce more in the US than we ever have in history.

There are only a few options in front of us if we want to increase the working class relative value again. 1) Increase their skills through education, 2) Smash the machines, or 3) Introduce imperfect substitutes to the American worker through increased immigration. I choose options 1 and 3. Bernie Sanders and Donald Trump have chosen options 2, in effect trying to turn back time, and they try the opposite of option 3 by limiting immigration. In fact, our politicians have chosen that exact same set of policies for decades. Preventing technological innovation and restricting immigration has long been the policy choice of both Republicans and Democrats.

Has it worked?


To learn more about immigrant labor as imperfect subistutes to native labor resulting in increased wages and employment, please read the following study by Gianmarco I.P. Ottaviano and Giovanni Peri entitled, “Rethinking The Effects Of Immigration On Wages”. Or you can just play fantasy football. Start thinking of funny team names now.

http://www.nber.org/papers/w12497.pdf

You can read an excerpt from Ottaviano and Peri below:

In taking the general equilibrium approach instead, one realizes that the substitutability between U.S.- and foreign-born workers with similar schooling and experience, as well as the investment response to changes in the supply of skills are important parameters in evaluating the short and long run effects of immigration on wages. We therefore carefully tackle the tasks of estimating the elasticity of substitution between U.S.- and foreign-born workers within education-experience and gender cells and we account for physical capital adjustment in the short and long run. We find robust evidence that U.S.- and foreign-born workers are not perfect substitutes within an education-experience-gender group. This fact, and the yearly adjustment of capital to immigration, imply that average wages of natives benefit from immigration, even in the short run. These average gains are, in the short and long run, distributed as a small wage loss to the group of high school dropouts and wage gains for all the other groups of U.S. natives. The group suffering the biggest loss in wages is the contingent of previous immigrants, who compete with new immigrants for similar jobs and occupations.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s